The closure of Macquarie’s wrap underscores the difficulty of getting a platform service right, says independent platform consultant Stan Kirk.
Macquarie said last week it is closing both its UK wrap platform and the adviser support service Veracity, launched under John Baxter.
Kirk says: “A wrap is hard to get right. Macquarie was hor-rible, the front end was terrible and the online experience was truly awful.”
Kirk says the wrap closure will cause chaos for IFAs on a larger scale than for previous closures.
He says: “They had about £130m on the platform, which is a lot more than American Express, which had £30m. When it closed, it caused a lot of work for intermediaries who were telling their clients they had done all the due diligence on it.”
Institute of Financial Planning chief executive Nick Cann says: “This will have a massive impact on how advisers enhance their due diligence from here.
“The FSA has agreed it sees no problem with firms having a one-platform strategy but, as the market continues to develop, this remains a big call.”
The closure comes just more than a month after Macquarie recruited two business development managers from James Hay and a training and relationship manager from Standard Life, and just three months after Macquarie launched a drive to improve its online service.
Staff at the company were informed of the closure last week and a consultation is under way to decide on job losses. The firm says staff will receive “all the support they require”.
A Macquarie spokesman says: “Due to a combination of execution challenges and difficult business conditions, Macquarie does not see a long-term future for its wrap platform in the UK, or for the Veracity business as part of Macquarie.
“We will spend the next few months supporting the small number of financial planners and clients who use the platform to facilitate a seamless transfer of investments to other providers.”
In July 2009, Macquarie took a 20 per cent stake in Paradigm Norton. Chief executive Barry Horner says he met with Macquarie last week and the firm reassured him that it would not be selling its stake.